Dow and Mitsui postpone sugarcane polymer plant

Bob Moser

Published: January 10, 2013 6:00 am ET

Related to this story

Topics Materials, Suppliers, Sustainability

SÃO PAULO, BRAZIL (Jan. 10, 1:30 p.m. ET) — Dow Chemical Co. and Japanese trading company Mitsui & Co. Ltd. will postpone plans to build a plant for sugarcane ethanol-based plastics, citing rising design and construction costs and land ownership laws in Brazil for the indefinite delay, Plastics News confirmed this week.

The green plastics project, first announced in 2007, had been slated to break ground this year on a biopolymers facility in Santa Vitoria, Minas Gerais state, at a projected cost of US$1.5 billion. Dow formed a joint venture with Mitsui in July 2011, with plans to plant and harvest their own sugarcane, build an ethanol plant with 2.7 million metric tons of cane capacity, and follow it with an ethanol-to-ethylene and biopolymers plant. The entire complex was originally slated to begin operating later this year.

Dow told Plastics News it and Mitsui will postpone phase two, building the plastics plant. The first phase, which includes expanding sugarcane plantations and building an ethanol plant, remains on schedule. The companies currently have about 50,000 acres of first-generation cane growing and plan to harvest in 2014.

“The Santa Vitoria project is of high strategic importance to Down and Mitsui, and the construction of the first phase for sugarcane ethanol production is proceeding as scheduled,” Midland, Mich.-based Dow said. “The two companies continue to work together to mitigate and eliminate barriers to proceed with the second phase as soon as possible.”

Since 2007, a handful of other ethanol-based plastics projects have been announced in Brazil, but only Braskem SA has been able to follow through. Its first “green” plastics factory began operating in the second half of 2010, in Triunfo, Rio Grande do Sul state. Braskem has announced plans for a second polyethylene plant in Brazil’s center-south region and a third plant for ethanol-based polypropylene, but firm details on either project haven’t been provided.

During IHS’ Latin American Petrochemicals & Polymers Conference, held in May in São Paulo, Braskem and Dow officials said “green” PE easily draws a premium of 40 percent or more from clients eager for an enviro-marketing edge, and Braskem’s product was already cost-competitive with naphtha.

South America remains a net PE importer, with 2.6 million tons imported in 2011 and an average annual growth rate of 6.6 percent expected by IHS through 2016. Brazil’s PE imports should grow at 9 percent per year, reaching 1.2 million tons by 2016.

In the short term, Dow will focus on its most profitable segments, particularly in the United States with shale gas reserves. Dow is investing $4 billion in the U.S. Gulf Coast to boost ethylene and propylene capacity through 2017.


Comments

Dow and Mitsui postpone sugarcane polymer plant

Bob Moser

Published: January 10, 2013 6:00 am ET

Post Your Comments


Back to story


More stories

Image

A. Schulman reports growth in sales and profit

October 22, 2014 7:58 pm ET

Executives with materials maker A. Schulman Inc. have to be smiling after seeing full results for the firm's 2014 fiscal year.    More

Image

PolyOne takes on LED lighting

October 22, 2014 4:23 pm ET

PolyOne Corp. is making inroads into LED lighting applications with its Therma-Tech-brand material technology.    More

Image

Simple lightweighting in packaging, caps not so simple anymore

October 22, 2014 4:16 pm ET

The days of finding simple ways to remove additional weight — and costs — from plastic bottles are over, according to one expert.    More

Image

Sales, orders climbing for Wittmann Battenfeld

October 22, 2014 4:04 pm ET

Equipment maker Wittmann Battenfeld GmbH expects sales this year to increase 7 percent, to 295 million euros, as it said some key markets, including...    More

Image

Bergen International adds manufacturing space, extrusion line

October 22, 2014 3:42 pm ET

Chemical foaming agent manufacturer Bergen International LLC recently doubled its manufacturing capacity, added an extrusion line and laboratory space...    More

Market Reports

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 million dollar plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events